Updated: Sep 23, 2018
Spotting a market opportunity can be a tricky thing, even for experienced Forex traders.
Knowing when to enter and exit a trade could be daunting. So how does one determine whether its the right time to enter a trade.
Most traders rely on fundamental or technical analysis or a combination of the two!
Focus on the pairs you're most interested in, and see how they have behaved recently. For example, check the highs and lows they have hit, along with the support and resistance levels they have touched. Always review the previous days news, in to order to gauge the markets sentiment, pay special attention to employment, economic growth indicators and what matters most, interest rate decisions. Even more importantly, check the economic calendar to see what news and events are planned for today!
Finally, you should review the technical analysis for the pairs you're interested in trading. This allows one to determine the market direction, whether it be following a trend or spotting a reversal.
It is always safer to trade with the market direction rather than against it,
Remember, the trend is your friend.
Before opening a trade always determine a risk/reward ratio, so you're never risking more than you're prepared to lose.
Always set pre-defined take profit and stop loss values and never trade with more than 3% equity per trade.